This week we head out to Norfolk to visit regional electricals retailer Hughes and Norwich’s 240-year-old department store Jarrold. Then it’s a journey into rural East Anglia and a trip to the seaside in upmarket Southwold. Continuing along the coast in Kent we visit pictureseque Whitstable, Margate and Essex’s prime shopping destination, Lakeside.
If one thing is true about retail in the Southeast of England, it’s the region’s refusal to conform to type. From the woebegone high streets of Margate, to picturesque tourist coastal towns in Norfolk, to gleaming shopping complexes such as Lakeside and the soon to be opened Westfield Stratford, it’s a place where fortunes range widely from subtle wealth to obvious decline.
Both East Anglia and the Southeast are facing a struggle familiar to retailers in the rest of the country, with shoppers feeling the effects of public sector cuts, job losses and inflation. But East Anglia in particular faces its own challenges; an agricultural sector in long-term decline, a dearth of motorways and next to no public transport. “There are three types of places in East Anglia,” says Robert Hughes, managing director of regional retailer Hughes, which has 34 stores mostly in East Anglia. “Norwich is the regional centre, surrounded by towns in agricultural areas, and coastal towns are different again. There’s no one size fits all – you need a different offer for each.”
As the regional centre, retailers say that Norwich has proved reasonably protected from the recession. Certainly, when I visit early on a Monday morning, the shopping streets are already abuzz.
While 2011 has been challenging, the city’s 240-year-old family-owned department store Jarrold is still going strong. “Norwich hasn’t had the same peaks and troughs as the rest of the country,” says managing director Peter Mitchell. “But this year has been tougher. People are still coming out to shop, but they’re more cautious about spending.”
A thriving finance sector means the city has always flourished, and Norwich is East Anglians’ first and obvious choice for big shopping trips and purchases. “It’s not been recession proof, but it’s quite resilient,” says Warren Sawyer, store manager at Hughes’ Norwich branch.
But go just a few miles outside the city and it’s a different story, says Hughes. Throughout East Anglia’s agricultural area are dozens of Georgian towns – such as Harleston, and Fakenham in Norfolk – that are too far from the coast to attract tourists and which are all feeling the consequences of the problems British farmers have faced over the past decade. “We have stores in some of these towns and we know trading is hard,” says Hughes.
Generalist retail offer
But there is optimism. Tony Brown, chief executive of department store chain Beales, is looking on the bright side. The retailer is in the process of rebranding 19 Co-op Anglia stores into Beales branches in market towns across the region, due to open in October.
He says high petrol prices and a love of local means there’s an opportunity to provide people with a generalist retail offer. “More and more people don’t want to travel – the cost of travel is huge in those areas and you don’t get anywhere quickly.” Diss, a town a mere 20 miles from Norwich, generates the highest sales per square foot for Beales because shoppers from the surrounding villages don’t even want to attempt the journey to Norwich. “The lack of motorways can mean that if you get stuck behind a tractor in East Anglia, you’re there for life. The area’s cities are well served by department stores, but we think there’s business to be had in the outlying towns.”
East Anglia’s riches are often found on the coast. With some well-to-do seaside towns dubbed Kensington-on-Sea, wealthy second-home owning Londoners have both breathed new life and brought new problems to some of the picturesque seaside villages dotted along the eastern coast.
Hughes says that a massive 60% of owned houses in Southwold are second homes. This can lead to difficulties for locals priced out of the market, but it is also the one thing stopping these towns from entering decline.
Combined with tourists, day trippers and a large retired community, Norfolk and Kent’s seaside towns have proved that nothing motivates shoppers like a beautiful setting. Whitstable in Kent is a perfect example of seaside retailing success in the Southeast, with its winding high street filled with dozens of independent retailers – all packed with people on one sunny Sunday who all appear willing to spend.
This is in direct contrast with the fortunes of other Kent seaside towns such as Margate, which have languished for years as their former Victorian grandeur has faded. Chris Garner, managing director at management consultancy Nicholas Alexander, calls Margate one of the most disadvantaged retail towns in the UK at the moment.
Its prosperity used to depend on town-dwelling holidaymakers upping sticks and spending two weeks there every summer, but its decline has never been reversed after the tourists deserted it. “You’ve got a structural problem and there hasn’t been investment because income isn’t being generated locally so it’s become squalid. The town has a legacy infrastructure that just isn’t justified by the amount of demand it now has.”
This over-grown infrastructure isn’t something smaller seaside towns suffer from, and their small size and quirky characters are what attract people today. “If a retail venue has something exceptional about it, it’s probably doing better than normal towns,” says Garner, “Towns like Whitstable serve a wealthier, more niche customer base exceptionally well.”
This wealthier customer base brings all kinds of opportunities for retailers in East Anglia and the Southeast. Jonathan Ainsley is director of asset management at Capital Shopping Centres, which runs both out-of-town giant Lakeside in Essex and in-town centre Chappelfield in Norwich, and he says the London contingent in Norfolk has broadened the horizons of East Anglian shoppers. “You have an educated retail marketplace. These people are used to, for example, eating out in a Carluccio’s, so there’s demand for these kinds of places.”
Brown agrees the shoppers are discerning, and Michelle Jarrold, development director at her family’s Norwich department store, says East Anglia has a “subtle, hidden wealth”, which sets it apart from its more blingy neighbours Essex and Kent. But because of this wealth profile, Jarrold says retailers and brands assume there is an opportunity to bring high-end, luxury, designer names to the region. “They very quickly discover that’s not the case,” she says. However lifestyle brands such as White Stuff, Crew and Joules all do well.
Looking to Lakeside
The next stop on the tour is a retail scene that couldn’t be further away from the cobbled streets of Whitstable or Norwich’s family-run department store. It’s Junction 31 of the M25, and the famed shopping Mecca that is Lakeside in Essex, 21 years old this year. The subtle wealth of Norwich has all but vanished in this haven for brand lovers.
Ainsley claims more Rolex watches are sold in Lakeside than anywhere else in the country, and says Lakeside’s branch of Superdry is among the retailer’s top five best performing stores. “Shoppers here are very loyal and very brand and fashion aware.” While new brands don’t always fare that well – Lakeside shoppers tend to respond well to buzz generated by London stores, he adds – the more established ones find very responsive shoppers in Essex.
“Well-known brands always trade well here. A lot of companies roll out to London first and the buzz generated by those new stores means customers in Essex are very exposed to the fashion market on a regular basis.”
Lakeside is working hard to keep enticing shoppers, with a 35,000 sq ft new family leisure offer planned and 350,000 sq ft of new retail space to be built. Having turned 21 this year, the centre has to keep evolving quickly to make sure shoppers’ demands are catered to.
“People’s perception of shopping has changed on many different levels. It’s gone from shoppers having a reason to go shopping to more of a leisure activity. Our job is to create an environment that meets the modern shopper’s needs,” says Ainsley. This often means bigger stores.
This year, Primark went up from 70,000 to 100,000 sq ft, and Topshop is expanding. Building up rather than out – these are roof-top extensions – Ainsley said shoppers are constantly after more choice and more space. “The stores that people want have got bigger, and from 1995 onwards we started to create larger format stores.”
One other developer well aware of the changing needs of the shopper is Westfield. Its Stratford centre is due to open in September and it hopes many of its shoppers will be well outside London. But Ainsley says he isn’t worried about the impact on Lakeside. “When it opens people will go and see it. I think we’ll see an initial dip and then we’ll return to our strong position.”
He says only 1% of Lakeside’s catchment will be affected – Romford will be the main battle zone – but says most people in Essex will be conscious that it’s further to drive to.
While the big malls battle for Essex shoppers’ spend, Norfolk is reacting in its own way to changing shopping trends. Jarrold is having to work harder than ever to encourage customers to spend. “There are fewer bags in their hands and it’s more cautious. We just have to work that little bit harder, because they will spend providing it’s something unusual,” says Jarrold.
Mitchell adds that it is business as usual for the department store, which has always worked hard to differentiate itself from the competition – Norwich has a House of Fraser, Debenhams, Marks & Spencer and a John Lewis to contend with.
“That element of tapping into people feeling good about their shopping is what we do,” he says. “We just have to do it more. That means more interesting ranges, more events, promotions and new brands. We need to stimulate people to overcome a reluctance to spend.”
Brown, meanwhile, is relying on a strong local offer to entice shoppers. “Shoppers here demand more of their high streets and are protective of them.”
The East may house a range of retailers and an even wider range of shoppers, but one impression has emerged from this tour of the area; those retailers and retail destinations that stand out and offer more than the rest will stand the test of time. But retail is nothing if not varied – England’s eastern regions are proof that successful retailing can be found in many different guises.
Getting Co-ordinated - Towns that work
Much has been made of the decline of the high street, but there are towns all over the Southeast that continue to attract hordes of shoppers. Those doing well say one thing is crucial – town centres need a co-ordinated voice, either through an association or a town centre manager. Independent retailers situated in and around the Norwich Lanes have formed an association.
Peter Mitchell, managing director of family-owned Norwich department store Jarrold, says it is helpful when issues come up that need to be discussed with the council. “Without that collective identity, independent retailers can sit there without a voice – and sometimes we don’t help ourselves, because people may be acting too individually.”
Brighton is another city continuing to attract crowds with its well-known mix of independents. Julia Chanteray, president of the Brighton and Hove Chamber of Commerce, says its success is partly down to fairly low levels of 20th century clearance, meaning Brighton has more smaller retail units than most cities. “Smaller shops and cheaper rents have allowed independent retailers to flourish here, and this gives it a different feel to most places,” she says.
It’s easy to put these retail successes down to luck – places near the sea, or that inherited beautiful architecture, do have a natural advantage. But it’s not all about the day-trippers. Ainsley says The Glades shopping centre in Bromley is working because it’s been designed to complement the town centre rather than compete with it.
“In Lakeside, we stand or fall by our own design. In Bromley, we need a successful town centre to attract people into the in-town shopping centre.”
He says a strong voice and single vision is crucial.
The independent offer in any high street is likely to matter more and more to shoppers keen to see the back of “clone towns” and looking for something interesting in their shopping trips and the places doing well are those who have managed to cultivate a healthy independent offer as well as attracting the big names. Mitchell says the downturn could actually be good news for independents – rents are falling, significantly in some areas, and landlords are becoming more flexible in the terms they offer.
Hughes - a thriving regional retailer
The electricals sector is having a difficult recession. The national chains are reporting slumps in sales – Comet’s sales in the year to April 30 were down 6.8%, and the internet continues to undercut stores on price. But Hughes is that rare beast – a successful local electricals chain. Managing director Robert Hughes (pictured) says the company is thriving despite the difficult conditions, reporting record profits this year and last year. But doing business in such a market is not without its challenges.
“The electricals market has been appalling,” he says. “There are falling volumes and falling average prices.” Hughes estimates the brown goods market is down by around 7% this year, although in the past five weeks, Hughes sales have increased 45% on last year. Part of the region is going through its digital switchover, and stores and drivers have been busy helping customers ensure their TVs are ready for the change. But Hughes says this is no long-term fix: “That just brings forward demand from future months. No one in our industry is excited about anything in the brown goods market, except perhaps the Olympics. And even then there’s no precedent for the Olympics to drive sales of brown goods.” White goods have held up better, being one of the few areas the supermarkets haven’t muscled in on.
“The good news for us is that capacity is coming out of the market,” Hughes says. The national chains have shut branches in the area, and local competitor Bennetts went into administration, with Hughes buying five of its branches to add to the 34 Hughes stores it already runs.
“There will always be a market for electricals, but there’s less capacity for advice-driven sales and more capacity for non-advice driven sales.” While trading on the web does erode margins, Hughes is confident he can play the online game – it’s the supermarkets that are a worry, and he’s relying on the business’ reputation for service to help it stand out. “We have over 100 vehicles driving around servicing people’s homes. That’s why we’re having a good digital switchover.”
While plenty of customers in East Anglia have a strong preference for local retailers, the company takes nothing for granted and isn’t solely reliant on the retail market. It’s supplying the Olympic Games and village with white goods, has a business-to-business arm and owns 100,000 white goods which it rents out and maintains. There are eight stores in retail parks in the Northwest trading under the brand name Apollo 2000. Even in the hardest of markets, local retailers can stand their ground against the big names if they’re clever about it.
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